Space-X exists because of NASA. Space-X, Blue Origin, and Sierra Nevada are the principle beneficiaries of a series of commercial space incubation projects started by NASA under the Bush administration and continued to date. NASA remains a principle customer for Space-X—which tells you a lot has changed.

From 1958, when NASA was created until the end of the century, American spacecraft were contracted for NASA in the same way weapons systems were contracted by the military (and often by the same companies, using the same basic spacecraft). This got the job done, but with the federal government as the only customer, it didn’t exactly spur economy.

What’s changed in the last twenty years is that NASA is now encouraging companies to develop commercial space services which they can then sell to NASA or anyone else. NASA promises work to qualifying participants, but those participants own their own assets.

That’s why Space-X has developed fly-back boosters where no one else has before. No one did before because NASA didn’t require it. But now, Space-X thinks they can make money by reusing their boosters, and using each one to sell multiple launches to NASA—and others. This is an economic game changer.

As I write this, Space-X has now moved well beyond NASA’s incubation, and is flying the Falcon Heavy which they created on their own, for their own commercial purposes, but based on the Falcon series of boosters that NASA helped foster and incentivize. This is exactly what these programs were meant to lead to. Next, Space-X is developing the BFR (or whatever they are calling it this week) which Musk wants to use to colonize Mars and blast executives into orbit or who knows what. NASA didn’t incentivize any of that, but if Space-X pulls off the booster, NASA might very well book passage on it. Meanwhile, they continue to develop the SLS in the old cost-plus accounting military procurement model because, well that’s where we still are today. But tomorrow? We’ll see.

These commercial incubation programs have made the last twenty years the most significant in the development of the American aerospace industry since the decades of the 1920s and 30s, when the NACA and the Guggenheim prizes did much the same for aeronautics.Thisis what NASA is for—this and the basic research and exploration that occupy 2/3 of it’s budget.

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